Nairobi: India will lend Kenya USD 45 million to help develop a textile factory and other smaller industries, the leaders of both nations said on Monday.


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Prime Minister Narendra Modi is on a four-nation tour of Africa that is part of a policy push to make his country a more global player, economically and diplomatically.


"India is Kenya`s largest trading partner and the second largest investor here. Even with that, there is a potential to achieve much more," Modi told a news conference with Kenyan President Uhuru Kenyatta.


Monday`s deal highlights Kenya`s desire to link up with countries that can help improve its struggling manufacturing sector.Kenyatta said USD 30 million of the funds would be used to revive Rift Valley Textiles Factory, which went out of business in 2000 as mismanagement of the cotton sector led to Kenyan production to collapse. The factory is owned by a local university.


Kenya exports raw or semi-processed commodities such as tea and coffee to India, while India exports finished products including pharmaceuticals, steel, cement, paper and paperboard, electronics, machinery, vehicles and motorcycles to Kenya